Deckers Outdoor Corporation upped its full-year quidance after reporting net sales increased 34.4% to $97.5 million for the first quarter ended March 31. Growth of the UGG and Simple brands more than compensated for a dip in sales of Teva shoes.


Gross margin rose 173 basis points to 47.3%. Earnings per share rose 17.8% to 86 cents, cmopared to 73 cents in the year earlier quarter.


“Our better than expected results continue to be driven by our UGG brand, as response was very positive to our expanded spring line of sandals, boots and slippers,” said Angel Martinez, President and CEO. “With regard to Teva, sales were below plan primarily due to the difficult retail environment. That said, we continue to believe that our strategy to evolve Teva into an outdoor, performance-oriented brand and extend its selling season into the second half of the year remains on track. For Simple, we witnessed strong sell-through with the new spring ecoSNEAKS and Green Toe collections across all channels of distribution, which underscores our belief that the sustainable lifestyle movement is resonating with consumers around the world.”

UGG brand net sales for the first quarter increased 83.6% to $54.8 million compared to $29.8 million for the same period last year. The significant sales increase was attributable to strong domestic demand for the UGG brand coupled with greater distribution for the spring collection versus the same period a year ago.


Teva brand net sales decreased 2.6% to $37.7 million for the first quarter compared to $38.7 million for the same period last year. The modest decline in sales was the result of lower than expected consumer demand in a difficult retail environment, which impacted the level of projected reorders during the quarter.


Simple brand net sales for the first quarter increased 25.2% to $5.1 million compared to $4.0 million for the same period last year. Simple sales continued to benefit from heightened awareness and increased demand for the brand driven by innovative product offerings, a broader marketing and advertising effort and increased points of distribution.


Sales for the eCommerce business, which are included in the brand sales numbers above, increased 75.4% to $15.6 million for the first quarter compared to $8.9 million for the same period a year ago.


Sales for the retail store business, which are included in the brand sales numbers above, increased 145.4% to $5.3 million for the first quarter compared to $2.2 million for the same period a year ago.


Full-Year 2008 Outlook


Based upon the company's first-quarter results coupled with improved visibility into the second half of the year, the company currently expects its full year revenue to increase approximately 31% over 2007, up from previous guidance of approximately 25%.


The Company currently expects its full year diluted earnings per share to increase approximately 27% over 2007, up from previous guidance of approximately 20%.


Fiscal 2008 guidance includes approximately $8.8 million of stock compensation expense.


Second Quarter Outlook


The company currently expects second-quarter 2008 revenue and
diluted earnings per share to increase approximately 50% and        30%, respectively, over 2007 levels.


                  DECKERS OUTDOOR CORPORATION
                           AND SUBSIDIARIES
             Condensed Consolidated Statements of Income
                             (Unaudited)
          (Amounts in thousands, except for per share data)

                                             Three-month period ended
                                                     March 31,

                                                 2008         2007
                                             ———— ————

Net sales                                    $    97,535       72,575
Cost of sales                                     51,387       39,158
                                             ———— ————
   Gross profit                                   46,148       33,417

Selling, general and administrative expenses      29,088       18,345
                                             ———— ————
   Income from operations                         17,060       15,072

Other (income) expense, net:
   Interest income                                (1,389)      (1,166)
   Interest expense                                   32          299
   Other, net                                       (251)          40
                                             ———— ————
Income before income taxes                        18,668       15,899

Income taxes                                       7,374        6,448
                                             ———— ————

Net income                                   $    11,294        9,451
                                             ============ ============

Net income per share:
   Basic                                     $      0.87         0.75
   Diluted                                          0.86         0.73
                                             ============ ============

Weighted-average shares:
   Basic                                          13,008       12,595
   Diluted                                        13,175       12,932
                                             ============ ============